DrBourse FA Help for Beginners

[Gringotts Bank]

Dividends, Franking & Payout Ratios….

A minor suggestion for any budding Financial Analysts out there.....

Something I look for in any Analysis I do ATM is that - Franking % & Payout Ratio, should both be WELL BELOW 100%.....

50% or LESS would be ideal IMO.....

In the recent past, and for the ST Future, Companies need to retain as much of their Profits as they possibly can.....

Companies that "Payout Too Much" are flirting with serious repercussions....

Shareholders should be happy with reduced Dividends, rather than risk getting None.........

The argument that Companies need to keep Shareholders happy with large Dividends/Franking Credits just does not stand up in todays Economic Climate....

Remember to DYOR....

Thanks for the info.

For someone who would like to add FA to their stock trading system but doesn't have the time and expertise, what is the 'quick and dirty' method please? I feel something would be better than nothing, for TA-only traders. Tradingview has an extensive FA screener that I've never used. Here it is below. Which of these should I add, and what sort of parameters would you suggest?

cheers.

 

[DrBourse]

Hi Gringotts......
Scanners of any sort are not part of my arsenal of trading tools any more....
Scanners are all "Black Box Systems" ....
A motto for Scanners should be - "Garbage in = Garbage Out" - in other words, if you enter the incorrect selection parameters, you will obviously get incorrect results out of the scanner.....

Any software pre-programmed to produce decisions for you is known as a ‘Black Box System” - They are Software Programs that have “Set, and Unknown” formulas within, that identify certain signals, like Buy & Sell Points, or Chart Patterns, ABC points, etc. Some are Good, most are pretty useless and you end up paying for a feature that does not really work. Brokers, Fund Managers & Bankers do not use them, so why should we use them. You need to gain the Technical & Financial knowledge, then apply that knowledge to your chosen software – what you don’t need is some software package telling you what to do.

ON THE OTHER HAND - why not use the brains of those in this industry that know how to do the 'hard yards' for you......

A suggestion for you is to check out the Top 20 Shareholders...Banks & Financial Institutions are pretty good at analyzing Financials - If you see that a Co has Banks & Financial Institutions in that Top 20, list then you can be pretty sure that the Co's Financials are better than Good, usually Very Good to Excellent.

Banks & Financial Institutions do not buy on Rumours, Ramping or outlandish Media and Analysts Reports.

I spent 28 years working for a Bank as an Accountant, Manager, then Auditor – that’s why I make the above call....

Personally, I obviously do my own research, then I check the List of Shareholders, then I refer to the Trading View's TA & FA as shown below, just to make sure that my personal calculations are 'On Track"..

Then, Drill down through that entire TA & FA section - all the work has been done for you.
Cheers....
DrB,

 

[Gringotts Bank]

Hi Gringotts......
Scanners of any sort are not part of my arsenal of trading tools any more....
Scanners are all "Black Box Systems" ....
A motto for Scanners should be - "Garbage in = Garbage Out" - in other words, if you enter the incorrect selection parameters, you will obviously get incorrect results out of the scanner.....

Any software pre-programmed to produce decisions for you is known as a ‘Black Box System” - They are Software Programs that have “Set, and Unknown” formulas within, that identify certain signals, like Buy & Sell Points, or Chart Patterns, ABC points, etc. Some are Good, most are pretty useless and you end up paying for a feature that does not really work. Brokers, Fund Managers & Bankers do not use them, so why should we use them. You need to gain the Technical & Financial knowledge, then apply that knowledge to your chosen software – what you don’t need is some software package telling you what to do.

ON THE OTHER HAND - why not use the brains of those in this industry that know how to do the 'hard yards' for you......

A suggestion for you is to check out the Top 20 Shareholders...Banks & Financial Institutions are pretty good at analyzing Financials - If you see that a Co has Banks & Financial Institutions in that Top 20, list then you can be pretty sure that the Co's Financials are better than Good, usually Very Good to Excellent.

Banks & Financial Institutions do not buy on Rumours, Ramping or outlandish Media and Analysts Reports.

I spent 28 years working for a Bank as an Accountant, Manager, then Auditor – that’s why I make the above call....

Personally, I obviously do my own research, then I check the List of Shareholders, then I refer to the Trading View's TA & FA as shown below, just to make sure that my personal calculations are 'On Track"..
View attachment 153354
Then, Drill down through that entire TA & FA section - all the work has been done for you.
Cheers....
DrB,

Good tip, thank you. What's the best place to find top 20 shareholders please?

 

[DrBourse]

Each company's web site is usually the starting point, and the most up-to-date information......
Then you need to look at each company's announcements for daily notifications...

 

[DrBourse]

 

[divs4ever]

And for today's useless bit of Information I submit the following;- ......................

When’s the best time to do a buyback?...............

At Berkshire Hathaway’s 2004 annual meeting, Warren Buffet shared a simple rule of thumb for buybacks:................

“When stock can be bought below a business’s value it is probably the best use of cash.”................

Of course, that’s easier said than done.................

not so useless to me

however i notice some companies resist buying back shares at lower than 'book value ' ( often the reverse ) and often do so whilst the company is posting after-tax losses

 

[DrBourse]

View attachment 153900

Sorry folks......Typo with my email addy....should have been - pkronk968@gmail.com

 

[DrBourse]

I would like to mention that I am copping Agro from quite a few Professionals within the ASX World, people within the industry that I have worked within the past – They seem to think they have a God Given Right to some of the Educational TA that I post.



Most of the Commercially Published TA, and to a lesser extent FA, is aimed at the Beginners & Sheep of this Industry.

Most of the Un-Published TA, and to a lesser extent FA, is tightly held within Industry Ranks of Brokers, Merchant Bankers, etc. etc.

The fact that I often post the Un-Published TA is what the abovementioned Professionals within the ASX World are pizzed off about.



Just because a few ASF Punters have not heard of some of my TA approach to Trading they feel they have to criticize – they feel the need to ‘score points’ at my expense, and their criticism serves to highlight deficiencies in their own approach to Share Trading Analysis.

One Punter went so far as to suggest that I just make everything up as I go – that’s a pretty dumb thing for anyone to say unless they have the knowledge to challenge my posts.

So, I certainly don’t need the “un-educated & irritating flack” that I get from some ASF Punters.

I should just back-off and ignore the knockers – but that’s not my style.

The fact that I continually find the need to justify myself within ASF is annoying and time consuming.

Just wanted to set the record straight for any interested beginners, and remind them to use their own common-sense in relation to my posts.

Cheers..
DrB.

 

[farmerge]

I would like to mention that I am copping Agro from quite a few Professionals within the ASX World, people within the industry that I have worked within the past – They seem to think they have a God Given Right to some of the Educational TA that I post.



Most of the Commercially Published TA, and to a lesser extent FA, is aimed at the Beginners & Sheep of this Industry.

Most of the Un-Published TA, and to a lesser extent FA, is tightly held within Industry Ranks of Brokers, Merchant Bankers, etc. etc.

The fact that I often post the Un-Published TA is what the abovementioned Professionals within the ASX World are pizzed off about.



Just because a few ASF Punters have not heard of some of my TA approach to Trading they feel they have to criticize – they feel the need to ‘score points’ at my expense, and their criticism serves to highlight deficiencies in their own approach to Share Trading Analysis.

One Punter went so far as to suggest that I just make everything up as I go – that’s a pretty dumb thing for anyone to say unless they have the knowledge to challenge my posts.

So, I certainly don’t need the “un-educated & irritating flack” that I get from some ASF Punters.

I should just back-off and ignore the knockers – but that’s not my style.

The fact that I continually find the need to justify myself within ASF is annoying and time consuming.

Just wanted to set the record straight for any interested beginners, and remind them to use their own common-sense in relation to my posts.

Cheers..
DrB.

Ah Dr B well put. I don't see why you feel you need justify anything. Usually the dumbest person says the most stupid thing. Pease carry on your good work.

 

[DrBourse]

I expect al lot of punters will just post the notation “TLNR” for this following post….. Basically it means – “Too Long Not Read“….

Beginners prepared to read the entire post may learn something about what is behind Analysts Target Prices and Estimates, or as I call them, “Guestimates”…..

......................................................................................................................
A word of WARNING to the **FA** Newbies - An Intrinsic Value is not a TA call - Intrinsic Value Per Share is not a call on where the Share Price will go to - Intrinsic Value is basically what the company is worth Per Share, based on the company’s published Financial Statements - Basically if the company was ‘wound up’, then each shareholder should get that Intrinsic amount - they would not necessarily get the current Share Price.......

An IV can be calculated in numerous different ways – A correct and Valid IV relies a lot on what formulas are used, such as, DCFM, DDM, DDMF, PRESVAL, RIV, IVRR, NROE, CGVI, GIVF, BIVF – and there are numerous others - MAKE SURE YOU UNDERSTAND WHICH FORMULAS ARE BEING USED and what the implications are relating to each formula...

Remember the old saying, “Garbage in = Garbage out”.......
DCFM = Discount Cash Flow Method,

DDM = Dividend Discount Method,

DDMF =Dividend Discount Method (Forward Return on Equity),

RIV = Residual Income Valuation,

IVRR = Intrinsic Value by Rate of Return,

NROE = Normalised Return on Equity,

CGVI = Comparative Growth & Value Indicator,

GIVF = Grahams IV Formula,

BIVF = Buffetts Balance Sheet IV........

PRESVAL = Calculates the Present Value of the Discounted Future Cash Flow per Share….

......................................................................................................................................................................
Each Analyst/Broker has their own versions of “how to calculate an IV”..... for example it may be a proprietary analytic framework that helps clients uncover value, adjusting for distortions and ambiguities created by local accounting regulations....... In some, the EPS adjusts for one-time events, capitalizes operating leases (where their use is significant), and converts inventory from LIFO costing to a FIFO basis. There may also be emphasis on the separation of operating performance of a company from its financing for a more complete view of how a company generates earnings.......

BOTTOM LINE HERE IS --- To use an IV correctly or to accept an Analysts Target Price or IV, you MUST understand how it is calculated.....


REMEMBER That the Public NEVER get to see the Actual/Correct & Up-to-Date Financials from any Company - the best we can get is from the Co itself, and those figures are only what the Co wants us to see, and by the time we get to see them they are usually 2 or 3 months "Out of Date".

Any other Analysis on a Co's financials usually include some of that Analysts own "Guesstimates" on what the published Financials actually mean - each one uses poetic licence to embellish their own individual publications - Analysts can’t be seen to just relay the Co Briefings ‘word for word’ as the Companies quote them – that would render the Brokers Reports/Analysis as “useless repetition”.

.....................................................................................................................................
What you need to do is work directly from the Co's Published Financials, the best way to get those are from each Co's web site.

Then you need to calculate your own Ratios, Margin of Safety etc..

A suggestion for you is to check out the Top 20 Shareholders...Banks & Financial Institutions are pretty good at analysing Financials - If you see that a Co has Banks & Financial Institutions in that Top 20, list then you can be pretty sure that the Co's Financials are better than Good, usually Very Good to Excellent.

Banks & Financial Institutions do not buy on Rumours, Ramping or outlandish Media and Analysts Reports.

...................................................................................................................................
It's a Game that most Expert Analysts, Broking Houses & Economists play – they are consistently wrong - nearly every year on nearly every stock they "Over Guesstimate Projected Earnings", then when they realise they were wrong yet again, they issue a downgrade within a few months (or Years) that conveniently meets the then current price.

Their Inflated Guesstimates continually lead the Sheep up the garden path as they force the prices up, then the same Expert Analyst’s, Broking Houses & Economists do a downgrade, so they can buy when the Sheep have to sell --- SOME OF THESE ANALYSTS ARE REALLY JUST LICENSED RAMPERS --- Grrrrrrrrrrr.

I would suggest Extreme Caution, as history has shown that most of these Guesstimates are WRONG.

Admittedly some Broking Houses receive Briefings directly from some Companies, the problem with that is that the Broking houses then somehow manage to ‘embellish’ those briefing figures to ridiculous levels, they manage to use words like, ‘we anticipate, we calculate, we project, etc, etc.

Broking Houses can’t be seen to just relay the Co Briefings ‘word for word’ as the Companies quote them – that would render the Brokers Reports as “useless repetition”.


IMO, Brokers Exist only to make you "BROKER"......


Don’t blindly follow anyone’s Guesstimates, Do Your Own Research.

Cheers...
DrB.

 

[finicky]

^^^

 

[DrBourse]

I humbly submit the following observations as todays useless “bit of info for the Beginners”:- …..

ATC’s Chart is currently providing some interesting TA signals……

From the Chart below you will notice that ATC has a recent habit of Rising, then dropping to similar Low Points (Points @ A, B, C & D)….



The Q now is, where to next?

From my perspective, tomorrow’s Candle will provide the answer.

A Rise from just above Point D tomorrow should suggest another ST Rise. To abt $0.115c

On the other hand, a drop to Below Point D, would suggest another drop to the expected Point E, to abt $0.075c.

If the SP reaches Point E, Then the same Q arises, Where to after that, Point F would be Very Questionable IMO.

The game I play with these, is when I find something interesting like ATC’s recent behaviour, is that I just bring it to the attention of others – then I like to leave everybody guessing…


Well, I have a Lowball Bid in @ $0.075c (Point E), and an even Lower Bid @ $0.060c (Point F)….

If ATC’s Candle is favourable tomorrow, guess what I’m going to do!


Now B4 you make any decisions, you should consider the 2 Indicators that I use, atm they are not very happy (pages 37 to 43, 95, 108 & 109), and in case you are wondering, NO I have not started drinking the hard stuff YET..

And for those doubters, I would like to remind them that this all came to light because of that Benchmark Candle Formation in Mid Sept 2022.


There are numerous other TA signals in this ATC Chart, not going there today, the above is enough to give anyone a headache.


Cheers..
DrB.

 

[DrBourse]

It seems that some chatters did not appreciate my above post, so thought I would add a 'follow-up'.

Here are a couple of recent UNAUDITED Announcements to show what beginners need to watch out for.

View attachment 145513

The following is just a small snapshot from page 2 of the RMD 11 page announcement dated 12/8/22.
View attachment 145514

Using the above RMD 10 pages of UNAUDITED Financials produces a ridiculous set of Intrinsic Values.

Cheers.
DrB.

Revisiting a pet hate of mine - Unaudited Announcements & Financials.....
With the Guesstimate Season upon us there are bound to be lots more announcements that will lead the unwary beginners astray....
Todays example is from AWC (Alumina Limited).....

Note that the word "Unaudited" is not shown in the announcement line item....
However it is mentioned within the actual financials within the announcement.....

Beginners might like to refer back to my posts on 16/8/22, post nrs 53 & 54......
Beginners beware what information you are using....

Cheers...
DrB.

 

[DrBourse]

I should remind everyone that my analysis is geared toward my expectations and is inheritantly Short Term Analysis......
Data I use has been gathered from various web sites, and has not been verified by me. All data, calculation and values have been collated for my personal information and should not be taken as correct ......
Before acting on calculations displayed, you should seek appropriate professional advice. I do not accept any responsibility for any losses suffered due to reliance on the data, calculations or values.....
Cheers.....
DrB.

 

[DrBourse]

Bit late of me, but, Merry Xmas & a Happy & Prosperous New Year to Everyone.......
I am away Crusing the Seven Seas till Late Feb 24.....
Cheers.....
DrB....

 

[divs4ever]

Bit late of me, but, Merry Xmas & a Happy & Prosperous New Year to Everyone.......
I am away Crusing the Seven Seas till Late Feb 24.....
Cheers.....
DrB....

bon voyage

 

[Sean K]

@DrBourse would you use FA or TA for a 12 month individual stock tipping competition?

You may have wifi on your cruise....

 

[DrBourse]

@DrBourse would you use FA or TA for a 12 month individual stock tipping competition?

You may have wifi on your cruise....

Hi @Sean K ....
Yep, Wi-Fi works ok.....
Will only lob here if someone asks me a Q, or needs my help.....
As set out in my 3 "Help for Beginners Forums", stocks for me must pass my FA Analysis Rating of 60%, only then will I look at the TA - ST or LT,....
So, to answer your Q - Both FA & TA....
Cheers M8

 

[Garpal Gumnut]

Well Boursie, @DrBourse , As we seem to be in a bit of a bull market some advice to the troops on how to deal with bull markets generally rather than specifically.

btw I never thought I'd see you on a petrie dish sorry cruise. !! LOL.

Happy NY to you and yours, and keep on educating in 2024. I will be watching.

gg

 

[DrBourse]

Well Boursie, @DrBourse , As we seem to be in a bit of a bull market some advice to the troops on how to deal with bull markets generally rather than specifically.

btw I never thought I'd see you on a petrie dish sorry cruise. !! LOL.

Happy NY to you and yours, and keep on educating in 2024. I will be watching.

gg

Hi @Garpal Gumnut ...
Sorry M8, but as I mentioned to rcw, I do not have access to my PC and the necessary Spreadsheet Calculators, Charts etc that would help give me a 'Heads Up' to anything abt the Market generally for 2024 or for Specific Stocks.....
I should be back on deck late Feb 2024...
Cheers M8..